ISRAEL Law and Practice Contributed by: Charles Gottlieb and Osnat Issan, Gottlieb Gera & Co Advocates
3.2.8 Domestic Law Security Instruments If an English or New York law-governed security assignment were to be taken in respect of an aircraft registered in Israel, such security should be registered in Israel through the filing of the applicable form. As noted in 2.10 Cape Town Convention and Others , the Convention on International Interests in Mobile Equipment has not been ratified in Israel. Fees are payable with regard to pledge registration with the Israeli Pledges Registrar and notation of the pledge in the Aircraft Registry and on the aircraft Cer - tificate of Registration. An English or New York law-governed security assign - ment and a domestic law security instrument may be registered domestically with the Pledges Registrar or Companies Registrar (depending on the nature of the borrower). 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of security interests over aircraft and engines is generally recognised. 3.2.11 Effect of Changes in the Identity of Secured Parties A change to the secured parties under a security assignment will generally require the parties to amend the registration of the security or to re-register the security. To the extent that re-registration is required, this may affect the preference date of the priority of the assigned security. 3.2.12 “Parallel Debt” Structures “Parallel debt” structures may be utilised in Israel, provided that they are agreed contractually between the parties and do not result in ”double counting” of debt – ie, that payment of a portion of the debt to the security trustee will automatically discharge the cor - responding debt to the lender. 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws
3.2.13 Effect of Security Assignments on Residence of Secured Parties
Security assignment by itself should not create a per - manent establishment of the secured parties in Israel. 3.2.14 Perfection of Domestic Law Mortgages A domestic law charge or pledge over an aircraft or engine is perfected by its registration with the Compa - nies Registrar (if the mortgagor is an Israeli company) or the Pledges Registrar (if the mortgagor is an Israeli individual, or a foreign individual or entity). 3.2.15 Differences Between Security Over Aircraft and Spare Engines Security taken over aircraft and identifiable spare engines will typically take the same form of a fixed charge or pledge registered with the Companies Reg - istrar or Pledges Registrar (as applicable). Additionally, in the case of a fixed charge or pledge over an aircraft, this security should also be notated in the register of the Registrar of Aircraft to prevent the deregistration of the aircraft without the consent of the holder of such pledge or charge. A charge or pledge over spare engines cannot be registered in the Israeli Registrar of Aircraft. 3.2.16 Form and Perfection of Security Over Bank Accounts Security over a bank account will generally take the form of a floating charge over the account and any amounts received into the account in the future, unless the security is over a known deposit – in which case, a fixed charge may be taken. Each of the above-mentioned forms of security should be perfected by its registration with the Companies Registrar or Pledges Registrar (as set out in 3.3.3 Reg- ister of Mortgages and Charges ). Most banks limit the assignment of rights with regard to accounts; thus, it is preferable to provide notice to the bank and to receive its consent to any type of security created over the account. As banks have set- off rights, it is common practice to require the banks to expressly waive or subordinate certain of these rights in connection with the secured account.
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